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Bud exchanges land with an adjusted basis of $22,000 and a fair market value of $30,000 for another parcel of land with a fair market value of $28,000 and $2,000 cash. What is Bud's recognized gain or loss?

Respuesta :

Answer:

The recognized gain or loss of Bud is $2,000

Explanation:

The aggregate market value is computed as:

Aggregate market value = Fair market value + Cash

= $28,000 + $2,000

= $30,000

The recognized loss or gain of Bud is computed as:

Recognized gain or loss = Aggregate market value - Fair market value

= $30,000 - $28,000

= $2,000

So, it is a gain of $2,000

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